When is minimum wage too much?

[the_tyrant]

My 19-year-old daughter, who is back home from the University of Victoria until September, has found a summer job as a hostess at a well known B.C. restaurant a couple of blocks from our house. She’ll be working four- to six-hour shifts, three or four days a week.
She’ll get minimum wage, which was $8 an hour until April 30, when it went up to $8.75 an hour. But she expects to move into waitressing, where she can make far more money from tips.


http://www.theglobeandmail.com/report-on-business/your-business/start/tony-wilson/when-minimum-wage-hikes-make-no-sense/article2016037/page1/

The minimum wage where i live is even higher. Its $10.25 an hour ($9.60 for students) right now, and it will probably go up too!

my current part time job pays $13.50 an hour, so i unfortunately will not get a pay raise

[Tchocky]

Usually better to put in an earned income tax credit, but I can understand minumum wage systems. It's been cut at home recently, which is only logical.

I guess I see it as a compromise between what a perfectly competitive market would charge for an hours labour, and what the current system of monopolistic competition dictates through structure.

[UnderseaLcpl]

The minimum wage is always too much, regardless of the level it is set at. People tend to think of the minimum wage as being a safeguard against exploitation of workers by corporate interests, and it is not difficult to understand why this is so. Political interests that platform upon improving the lot of the common worker often claim to help people by raising the minimum wage, or intending to.

However, as with most things where there is any vested interest, the opposite is true. Raising the minimum wage does not improve the lot of the skill-less multitudes; It actually worsens it, which makes perfect sense in every way one might consider.

Some are die-hard fans of minimum-wage statues, often claiming that they improve the lot of the common worker. This is understandable, as they are told to believe this. Ironically, the same people who champion the minimum wage are blind to its obvious inefficacy. They think that they are standing against domineering corporate interests, but they are willfully being domineered by political interests. Evidence can be found in the fairly steady rate of minimum wage increase without a corresponding increase in middle-class wage-earners.

The truth is that minimum wage statutes, more often than not, reduce the income of the unskilled worker to zero. Businesses don't give a flying **** about social equality; they're too busy trying to make a profit in a very competitive environment. Raising the minimum wage simply causes them to hire fewer workers and be more picky about the ones they do hire, which obviously means that they hire fewer people. Where they can't do that, they simply move elsewhere, cut benefits, lobby for tax exemptions, and otherwise do everything they can to avoid the significant increase in overhead brought about by paying unskilled workers more, more-so when one's profit margin is as narrow as those typical of industries that employ unskilled workers.

[CCIP]

I think there still needs to be a reasonable minimum, though. Sure there is a big difference between zero and a very low wage, but let's consider the fact that if minimum wage is artificial and set by politics, then the poverty line and a bare survival minimum are set by the economy. If somewhere you have actual wage-earning, independent workers who put in the hours but can't meet that minimum, there's a problem - which is then naturally solved only by social welfare and tax relief programs, again a political move. Which at the end of the day I think are far less efficient ways to deal with the problem.

The author does make a few good points about minimum wage not being intended for workers feeding families, but you can't generalize that either.

I think the issue needs to be less about potential for abuse and mistreatment of workers, and more about the fact that if you can't ensure that all working people get more than a reasonable amount needed to survive, then your economy is well and truly broken.

[gimpy117]

minimum wage is about making sure that workers make a decent wage enough to live on. especially in a economy like this one that would allow employers to pay desperate workers comically low wages.

[Anthony W.]

Well when you're getting payed it - it's never too much, haha

I get 7.25 an hour

Not enough to finance my car obsession - which is why I'm starting my own business this summer.

[Armistead]

They should set min wage to at least $12's an hour and cut entitlements.

Most that make min wage as adults use about every entitlement government program there is. The majority that make min wage are called part time, work 30 hours per week and thus don't qualify for company benefits.

Both sides of the debate are poor using such a low pay rate, it really has no effect or changed incentive in the past. Basically the same people would do these same jobs regardless.

As for business raising prices, cutting jobs or cost....let them, a competitive market would correct things, someone will seek to make a fortune by keeping prices lower.

Most studies show the top managment and CEO's could give up 2% of their income to provide a $10.00 min wage with no change to bonuses.

It would also increase taxes paid in..

Sure, many working teens out of high school and college students do this work, but the numbers are growing fast for adults now fighting for these jobs...If students make a mere $12 per hour for working like slaves they could better pay for college and government again should cut student entitlements.

[UnderseaLcpl]

minimum wage is about making sure that workers make a decent wage enough to live on. especially in a economy like this one that would allow employers to pay desperate workers comically low wages.

No it isn't. It's never been about that, though we tell ourselves it is so we can feel good about it. Try living on minimum wage for a while - if you're single and don't have any kids, you can make it work, albeit somewhat uncomfortably. If you're married or have kids, you're screwed.

The minimum wage is nothing more than a political tool. Wages, prices, and living standards are all things governed by the economy, which answers to no-one. The reason minimum-wage workers don't make enough to live on is simple economic reality. Nobody is going to pay for unskilled services that cost extra due to the fact that workers must be paid a wage they can live on. You can try to make it so, but you'll ultimately end up with no industry at all, or a subsidized industry, which is even worse. Washington knows this, which is precisely why the minimum wage always seems too low, but remains popular.

Not that any of this is a problem. Minimum-wage jobs are minimum-wage because they aren't supposed to be jobs you can live on. They are intended to be entry-level jobs that give a new worker the chance to accumulate experience and earn good references for another job. The companies that provide such jobs are aware of this fact, and anticipate high turnover rates, as evidenced by the lack of benefits provided and high turnover rates.

Somehow, likely due to political machinations, people have turned this simple economic reality into a concept that minimum wage should be a wage people, and even families, can live on. As if that would ever f-ing work. It's as though people have somehow developed the attitude that because employers are "rich", they somehow owe unskilled people a living, notwithstanding narrow profit margins, quarterly performance reports, and a competitive business environment. I'd tell them to go to the Soviet Union, where such thinking was dominant, but it doesn't exist anymore.

Not that there's any need to worry. If the minimum wage were abolished, there would be more entry-level jobs for people who need entry-level jobs, not to mention reasonably-priced goods and excellent investment opportunities, all of which generate economic growth. Some of them probably would pay "comically" low wages, but then, people won't work for comically low wages unless they are comically stupid or unskilled, but there's no reason to worry about that. The market takes care of that all by itself, as evidenced by the abundance of cheap goods and services we already have, and the largely upwards trend in socio-economic mobility.

Whether you buy that or not in the logical sense (and you will actually buy it next time you obtain goods or services from a minimum-wage earner, whether you like it or not), there is also the inevitable economic truth that we are functioning in an increasingly globalized economy. This means that there is more competition to deal with, and therefore, less time and money to waste upon idiotic fantasy dreams of providing living wages to burger-flippers or shelf-stackers everywhere. This ain't the worker's paradise, it's the real world, and it demands efficient progress for any venture to be viable. Keep that in mind the next time somebody talks about minimum wage, no matter what their rationale is.

That said, you have my apologies for the tone of this post. This is a subject I feel strongly about. I'm not implying that you are an idiot or anything like that, nor would I know. It just pushes my buttons when someone even suggests that the idea of minimum wage is a good thing, and I think this message needs to be conveyed.

[TorpX]

Raising the minimum wage sounds good but has negative side effects. Companies will hire fewer workers, or move somewhere with a lower wage, if not overseas. People with low skills will not be employable; who would pay an unqualified 17 or 18 yr old 12+ dollars/ hr.? A better plan would be for the Gov't to cut taxes, so people could keep more of what they earn.


Missed the post; UnderseaLcpl said it better than I did.

[gimpy117]

"aren't supposed to be jobs you can live on"

are you supposed to eat food "you're not supposed to be able to live on" while you're gaining experience?

listen, there was a period where congress raised their own wages 10 times for inflation but never for the minimum. I can see where you have a point where nobody wants to work a minimum wage job...but it's the reality for some in this country, and I find you "let them eat cake" attitude a little insensitive. We need to ensure all Americans have a living standard worthy of the USA

[UnderseaLcpl]

"aren't supposed to be jobs you can live on"

are you supposed to eat food "you're not supposed to be able to live on" while you're gaining experience?

Well, my first question would be how one managed to get oneself in such a situation in the first place. Minimum-wage jobs aren't supposed to be support mechanisms. They're supposed to be entry-level jobs, meant for people who typically need entry-level jobs, which is to say that they are meant for young adults or teens with parental support or minimal financial ability. If you're trying to live on one, you've obviously made some kind of mistake, one which any number of government tuition and subsidy programs are ready to address and fix.

listen, there was a period where congress raised their own wages 10 times for inflation but never for the minimum. I can see where you have a point where nobody wants to work a minimum wage job...but it's the reality for some in this country, and I find you "let them eat cake" attitude a little insensitive. We need to ensure all Americans have a living standard worthy of the USA
And what? Congress raised their wages 10 times and that somehow translates into a mandated wage-increase for minimum-wage workers? As much as I hate the idea of congress raising their own pay, that doesn't really make a case for raising the minimum wage, as it would be economically unfeasible. Off the top of my head, given a 40-hour work week, it would cost this country roughly five-hundred trillion dollars to match such a pay raise when it comes to minimum wage, and that's not factoring in the economic costs applied over time, tax inefficiencies, or anything like that. That's a very conservative estimate.

Of course this attitude is a little insensitive, but then, that's how the world is. People are only sensitive when they aren't overly concerned about providing for themselves or their families. Given that, the obvious solution is to create more jobs by doing something sensible, like encouraging business. More business= more jobs=higher wages. Minimum wage does the opposite of that. It effectively penalizes business for utilizing unskilled employees. Business won't stand for that. They have profits to make, orders to fill, products to make, and employees to pay. Forcing them to pay more for employees is largely counterproductive, for reasons mentioned in my original post. Championing minimum wage does nothing more than eliminate jobs, eliminate means by which people can get a start in the business world, and ultimately eliminate cheap products the rest of us can utilize to save money and get ahead. Sheer folly, no matter how you slice it.

[gimpy117]

Well, my first question would be how one managed to get oneself in such a situation in the first place.

ahh the old fallacy that "well they must have done something wrong". That excuse has been used for just about every bill that looks to strip benefits to the poor. Sometimes bad things happen to good people. There was a time when higher level execs were taking jobs us kinds normally had because they got laid off for no fault of their own.the irony is, we whine and complain about the poor, while we do everything we can to help the rich, the last people who need it. But that plays into the fallacy, for if they are rich, they must be instantly good people who deserve to be given more, and that anybody who is not as successful as them must be doing it all wrong. I'm not for wages so high that nobody can afford to employ, But I am for making the minimum wage as high as it possibly can be. More money in the hands of many means a stronger economy, and a better standard of living for those people.

[Stealhead]

Honestly I dont think minimum wages should be too high if you get educated or trained in a skill you will earn more money a reward for bettering yourself and in return bettering society as a whole.

Most of us have worked low paying jobs while going to school or whatever and at least for me the fact that I earned little money and had to budget a lot was an inspiration to work harder I joined the Air Force and got some education there and after I got out I am a commercial refrigeration tech by the way I am not rich but I do well and the man who owns the company does better that is how it works really I mean do what you can to help poor people like donate your old clothes or something like that I gave an older car I had once to some group that gives them to low income people for next to nothing.Basically advance yourself and deal with the lower pay while you do it will build character.

One reason I dont support making min "as high as it can be"
It lowers everyone else pay level this upsets hard workers who earned what they get payed which means either everyone else has to also get a pay raise which costs more money
or companies do nothing and then you have animosity between lower end folk and others not good for working environments.Also those who are wealthy are the ones who own the companies like them or not and as someone else said if they made set to say $12.00 an hour then they are simply not going to hire very many non-skilled and will pursue mainly only skilled ones which truly screws the little man because than he is less likely to get a job at all and when they do hire a non skilled at $12.00 the poor chap will be getting paid that rate for years and years.

I think the wage should basically match inflation but even that is honestly unrealistic the only employer in the US that does this is the DoD that I am aware of matching inflation in pay and that is likely because Congress would dare not ever disapprove it is all after all it is called minimum wage for a reason it is not called "pay you closer to the person who has more skill,experience and service to the employer than you wage" that might sound harsh but life is harsh sometimes you are riding on top of the horse other times the horse tramples you.$13.50 is way too much in the United Sates for a minimum wage.(I know the OP is Canadian) I agree that it is more of a political tool.

Another note I have made in the past several years most folks that I have spoken with who immigrated to the US left there home nation because of liberal programs harming employment food for thought.




I have to generally agree with UnderseaLcpl on this one.

Also the reason that the Soviet Union failed was because its fundamental system did not work.

[gimpy117]

Another note I have made in the past several years most folks that I have spoken with who immigrated to the US left there home nation because of liberal programs harming employment food for thought.

who are you talking to then? show me the facts and i believe you. but that seems like another one of those magic republican tales...like the myth of the lone gunman saving the day, or the one about the magic functioning libertarian government.

[Stealhead]

These are people that I have met different places over the years.Give me a break man I did not have the conversations notarized and I am not going to give the names of the ones I know that is a bunch of nonsense your asking me there Gimpy.Are you saying that I am making these conversations up? I assure that I am not.

Uh sadly you are wrong I am not a Republican or a Democrat I am Independent and I pretty much dead center liberal/conservative wise a moderate I suppose.

Sorry Gimpy but you seem to have a very liberal point of view and when you see an opinion that goes against yours you label it as being the other parties, I honestly find it a little offensive that you more or less am saying in your post:

"but that seems like another one of those magic republican tales...like the myth of the lone gunman saving the day, or the one about the magic functioning libertarian government. "

To be honest this way of thinking is wrong no matter what your political leanings are.Not sure why a republican would wish to promote the idea that a liberal government is functional.

I am merely stating what these people told me most where from Eastern Europe two that told me this I will specify for you "fact checking" a husband and wife that where in a college course that my wife was in they where from Lodz,Poland originally they came in here in 1997 this was while eating lunch at a local restaurant in 2006 I left a tip for the server and told her to advance herself and educate herself so that she can get a better paying job she said that she was in college I told her to watch Fox News and never trust Liberals to buy a handgun get a concealed weapons license and to become the loan gun woman because republicans need a better myth.

That is a test I leave it to you to tell what of the last paragraph is true and which is just me being highly sarcastic.:salute:

[Sailor Steve]

But I am for making the minimum wage as high as it possibly can be. More money in the hands of many means a stronger economy, and a better standard of living for those people.
Cool. Let's make it $20 per hour. Where's it going to come from? You used the phrase "the old fallacy" several times, and every time you used it as a dodge to easily dismiss what you yourself don't have any real argument for. As USLCPL said, the idea of a minimum-wage job is that it's where you start out your career, not where you spend the next twenty years. People who have any brains at all start off in one of these jobs, then either move up the ladder or move to a better job somewhere else. These jobs aren't supposed to support families, and families who find themselves in that position actually have several recourses available, as has been mentioned but you ignored while prattling about "fallacies".

magic republican tales...like the myth of the lone gunman saving the day...
Not a myth at all, which I've pointed out to you in the past but you conveniently "forget" as soon as it suits you.

[magic452]

The myth of the minimum wage is that when you rise it all other wages will soon follow suit. You have more dollars but they buy less and you're still stuck in exactly the same place on the ladder.

People who make minimum wage do so for a reason, their skill sets are not worth anything but bottom rung wages. A sad reality of life so you might as well get use to it.

The higher you make the bottom rung the less jobs there will be, foreign competition will see to that. Products move around the world almost as easily as you can move on the interwebs.

A good economy is not paying the bottom rung more, it's creating more bottom rungs and than being able to move up.

Nobody but nobody starts or runs a business to give you a job, you have a job only as long as your labor makes someone money over a given period of time.

Magic

[UnderseaLcpl]

ahh the old fallacy that "well they must have done something wrong". That excuse has been used for just about every bill that looks to strip benefits to the poor.

Like what? Wages, benefits and services offered to the poor have only ever gone up in over a century. The only real exception I can think of was welfare reform in 199....7(?) and that proved to be perfectly reasonable.

Sometimes bad things happen to good people.
Keep that in mind the next time you are serviced by a minimum-wage worker. Remember to give them a generous tip. Of course, you aren't going to do that consistently if you do it at all because what you're actually saying is that somebody else needs to do something about this "problem".

There was a time when higher level execs were taking jobs us kinds normally had because they got laid off for no fault of their own.the irony is, we whine and complain about the poor, while we do everything we can to help the rich, the last people who need it. But that plays into the fallacy, for if they are rich, they must be instantly good people who deserve to be given more, and that anybody who is not as successful as them must be doing it all wrong. I'm not for wages so high that nobody can afford to employ, But I am for making the minimum wage as high as it possibly can be. More money in the hands of many means a stronger economy, and a better standard of living for those people.

An understandable perspective, and a politically popular one, but not a correct one - for many reasons.

Firstly, forget that bit about higher-level execs being canned and taking regular jobs. Even when such things happen, it is not difficult for an exec to find another job as they have excellent qualifications. If there are no such positions to take, that is a failure of of economic policy, not the economy itself. There are three hundred and sixty-million people in this country, and at least two thirds of them want dozens of different things on a daily basis. Lie to yourself if you must, but don't lie to me by telling me that the market isn't there. The market is always there, it just gets tripped-up by people insisting on wage controls, price controls, subsidies, and other nonsense.

Secondly, you're more correct than you realize in saying the we do everything we can to help the rich. I say you are correct because it is no secret that there are a number of easily exploitable tax loopholes, no matter what the tax rate is, and I imagine that you're as PO'd about that as I am am. I also say you are correct because whether you realize it or not, you're actually helping the rich by insisting upon government intervention in such matters. In giving the government power to intervene in such things you are also necessarily giving it the power to determine criteria in such things. Guess who has the most influence over what criterion are used? It isn't you. It isn't me. It's the rich people who can afford to influence government. You're shooting yourself in the foot by trusting the government to fix this "problem".

Thirdly, you are also incorrect in assuming we do everything we can to help the rich. If that were true, all the rich people would be here, along with their businesses and jobs. However, we are losing rich people and jobs to other countries, which suggests that, at the very least, we are doing somewhat less to to help the rich than those countries are. As contradictory as this paragraph sounds when compared to the last one, it is surprisingly consistent with what happens when you let the government do things.

Four, nobody thinks that rich people are instantly good or that they did everything right. There's a whole political philosophy built around the supposition that rich people are bad or immoral, and you're supporting it right now. Heck, even I don't think that they are good or did everything right either, and I'm on their side. It's not a matter of morality, it's a matter of economics.

Finally, I'd like to address your last point: I'm not for wages so high that nobody can afford to employ, But I am for making the minimum wage as high as it possibly can be. More money in the hands of many means a stronger economy, and a better standard of living for those people.

Naturally, you're not for making wages so high that people can't be employed, but then you turn around and say that you want to make the minimum wage as high as it can possibly be. And who, might I ask, is the divine spirit who determines what level this wage should be set at? Even if the market didn't do this all by itself, it sure as f--- isn't any branch of the government, whose inexperience and /or incompetence in fiscal matters should be readily demonstrable by its current fiscal state. Am I to assume that you trust this agency, the same one that rich people employ to get around taxes and statutes, to competently effect a reasonable minimum wage? Are you serious?

Then there's that last sentence. I totally agree with that. More money for more people = stronger economy. Unfortunately, it's not as simple as requiring employers to pay more. We used to have a manufacturing economy that thought that way. That economy is now largely Chinese. Now we have a service economy that is also steadily being outsourced. Obviously, tightening controls on business is not the way to keep it around. We need to free business from wage controls, not to mention taxes and most regulations. We need to attract so many businesses that they compete for workers and customers, which has always translated into higher standards of living.